/24-7PressRelease/ - LONDON, UK, December 25, 2007 - Early Pay Day Loans, a loan firm, has been sharply criticised for charging a huge interest rate of 2.6 million on a seven day loan advanced to a York woman.
York Credit Union Manager Mike Horncastle said that he was surprised to see the figure in the loan paperwork. Horncastle warned: "Because it is Christmas it is easy to lose the plot. But these kinds of deals, be they from door-step lenders or Internet companies, avoid them plain and simple if you can."
It is a first incident of its kind which came with an interest rate of 2,639,385.9 per cent APR. Loan was agreed with Early Payday Loan Ltd., based in Windsor, which lends up to 800 a time to its customers.
The loan was perfectly legally sanctioned and this is likely to raise a debate on whether there should be some limit on the amount of interest that lenders can charge. As of now, there is no interest rate ceiling in the UK. Some European countries like France, Germany and Ireland, have prescribed a limit on the interest rates.
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